The Caselaw that Shaped the Industry in 2021

It is likely not a surprise to anyone what the most impactful lawsuit was to the accounts receivable management industry in 2021. But the suit that was the second-most important might surprise some. And some hope that the case that was the most impactful in 2021 is also the most impactful in 2022, albeit for hopefully different reasons. asked some of the leading legal minds in the industry what lawsuit they thought had the biggest impact on the ARM industry in 2021. Here is what they said.

John Bedard, Bedard Law Group

No case had a bigger impact on the ARM industry in 2021 than Hunstein. Unforgiving language from the 11th Circuit’s two opinions sent the marketplace into a tail spin. I’m keeping my fingers crossed that Hunstein will also be the most impactful case on the ARM industry in 2022 when the 11th Circuit ultimately dismisses the case for lack of standing, making the entire Hunstein saga … much ado about nothing, literally. 😊

Manny Newburger, Barron & Newburger

It is frustrating to say that the case with the biggest impact on the collection industry in 2021 has been Hunstein v. Preferred Collection Management Services. It is a case that should have been of no significance whatsoever beyond the specific facts of the case. Instead, it has generated the fastest explosion of copycat suits against debt collectors that I can recall since the Foti case, and at a faster rate than Foti. It has impacted litigation budgets, vendor relationships, and even insurance relationships for industry members across the country. All of this fallout comes from a decision that has now been vacated on nothing more than the sufficiency of a complaint (and not the facts of the case).

On the negative side, Hunstein stands as a shining example of the harm that can be done when a defendant engages in reckless litigation tactics without regard to the potential consequences of a loss. On the other hand, it has sparked unprecedented levels of cooperation among industry stakeholders that I hope will continue coordinated amicus curiae efforts in future cases.

Stefanie Jackman, Ballard Spahr

Combined, the U.S. Supreme Court’s decision in TransUnion v. Ramirez and the 11th Circuit’s now-reversed (but still not finally decided) decision in Hunstein stand to impact consumer collections litigation strategy significantly in the coming year. The evolving jurisprudence on what is – and is not – sufficient for Article III standing offers plaintiffs the opportunity for creative pleading to keep a variety of claims based in federal statutes in state court. As a result, there is the potential for an avalanche of state court-level decisions interpreting and applying statutes like the FDCPA, FCRA, and other federal consumer protection statutes that permit recovery of statutory damages without any showing of tangible harm. In my view, Congress could not possibly have intended a process where state courts could become the main deciders of federal issues and related damage awards. But as we already are seeing in the Hunstein-related matters pending across the country, this strategy is already in play and we may see state courts weigh in significantly in interpreting Regulation F and other federal statutes in some jurisdictions.

Don Maurice, Maurice Wutscher

Two decisions. Hunstein of course! It gets my award for disrupter of the year! Although the original and substituted opinions have been vacated by the Eleventh Circuit, the damage is done and the complaints are still rolling in. But the real winner is TransUnion LLC v. Ramirez. This June 25 SCOTUS opinion is changing the course of litigation for all federal consumer protection statutes by driving case filings away from the federal courts and into state courts. I wrote more on this topic and the industry impact as part of our year-end survey at Best wishes for a Healthy and Happy New Year!

Aylix Jensen, Moss & Barnett

As I reflect on 2021, the lawsuit that I believe had the most profound impact on the ARM industry was the opinion in Hunstein. In April 2021, the Eleventh Circuit upended the ARM industry when it held that transmitting data to a mail vendor is an unauthorized third-party disclosure under the FDCPA. Not only was there an avalanche of copy-cat suits filed in state and federal courts, there was a substantial impact on the business operations of those entities which qualify as a “debt collector” under the FDCPA. The practical implications of the Eleventh Circuit’s decision were significant as several financial services companies were required to rethink their reliance on third-party vendors and their business operations as a whole. While the Eleventh Circuit’s opinion is presently vacated awaiting the en banc hearing, the ramifications of the Hunstein decision will likely reverberate for several years to come.

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